The Big Short - The Casse of the Century

In 2005, Dr. Michael Burry (Christian Bale), a hedge fund manager with a quasi-autistic personality, who listens to hard-rock at full volume in his office, discovers that the U.S. residential real estate market is precarious because it is distribution of unsecured loans, which are very risky and less and less profitable. Predicting, against the general view, that the residential market will collapse in the second quarter of 2007, he conceives to take advantage of this situation by contracting default hedges (Credit Default Swap, or CDS) underlying housing market securities, such as mortgage securitizations (Mortgage-Backed Securities, or MBS); he visits many banks with this idea, and they, believing the residential market infallible, accept his incongruous proposal with cynical joy. This provoked the ire of Burry's clients, who felt he was leading them to ruin and asked him to put an end to these foolish bets. These investors cannot see objective signs of the collapse behind the smokescreen of fraudulent bank manipulation and optimism disconnected from the reality of speculators. With no confidence in the howler, they plan to withdraw their money, but Burry, arguing in an article of his contract that allows him to do so in exceptional circumstances, decides a moratorium on withdrawals, much to their anger. Eventually, the market collapsed as he had predicted and his fund made a profit of more than $2 billion, with the value of the stock amounting to 489%.

Deutsche Bank broker Jared Vennett (Ryan Gosling) hears about Burry's CDS from the swagger of a banker Burry has dealt with and quickly realizes that Burry is right. It also decides to intervene in the credit default swap market - that is, it offers this strategy to its customers. A misplaced phone call alerts hedge fund manager Mark Baum (Steve Carell) of his plans, and Baum is convinced by Vennett. Both discover that the impending market collapse is delayed (but in the long run probably aggravated) by the sale of structured and sliced debt bonds (So-called CDOs), groups of poor quality loans that are rounded up and whose Senior units receive unduly the agency's highest AAA risk rating, due to conflicts of interest and dishonesty.

When Baum participated in the American Titrization Forum in Las Vegas, he interviewed a businessman who administered a synthetic CDO creation agency, whose activity is one more link in an increasingly large betting chain on defaulted loans: the speculative market is 20 times the size of the underlying economy. Baum realizes, to his horror, that the scale of the fraud will lead to a complete collapse of the economy. Baum's business partners convinced him to use Vennett's CDS to take advantage of the situation at the expense of the banks.

Enthusiastic young investors, Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock), discover by word of mouth the incredible bearish position of some on real estate and also decide to contract CDS. Because the capital of their fund is insufficient to give them access to the contract required for this (ISDA), they call on the retired banker Ben Rickert (Brad Pitt). All three also visit the Las Vegas Forum, where they manage to get their CDS. They are the only ones betting on the bankruptcy of subprime aA-rated, a particularly solid product. Shipley and Geller let out their joy at the thought of the gains they will make from the situation, but Rickert cools them, reproaching them for rejoicing in an economic collapse where many will lose their jobs, their property, their homes, and even their lives. Both realize the situation and try to warn their families and the press of the coming disaster. In the end, they will benefit greatly from the crisis, as a reward for having had the rare intellectual audacity to explore the other side of a scene that exposes itself to all others as the only reality.

Burry took a semi-retirement and now only invested in water; Baum renounces by a newly acquired courtesy to impose himself as a triumphant and continues his career; Rickert returns to his retirement and orchard; Jared Vennett receives a $47 million bonus; Shipley and Geller tried to sue the rating companies but were refused by all the lawyers, one of them chose to retire to Charlotte to start a family. Only one banker is imprisoned, and tomorrow a new inflated bubble of new CDOs, dubbed "Bespoke Opportunity Slices", could burst.